Wisconsin native, conservative critic of everything.
"Once abolish the God, and the government becomes the God." ---G K Chesterton
"The only objective of Liberty is Life" --G K Chesterton
"Fallacies do not cease to be fallacies because they become fashions" --G K Chesterton
"A man can never have too much red wine, too many books, or too much ammunition." -- Rudyard Kipling

Sunday, May 22, 2011

Lean Days for Banks Ahead?

...by keeping short-term interest rates below the level of inflation, a government can pay off its bondholders with cheapening money. Through regulations, it can compel banks and other financial firms to buy its own debt, much like geese being force-fed for foie gras. As a result, current yields and future inflation-adjusted returns on government bonds fall.

Describing a possible Geithner/Default-mitigating tactic.

So your banker will be on a forced diet.

HT: POWIP (While you're there, scroll down to the section where Meep takes a cold-eyed look at "responsible public officials.")